Wednesday, August 17, 2016

A debt collector is someone who regularly collects debts owed to others. It could be a collection agency, a lawyer, or a company that buys delinquent debts and then tries to collect them. On the other hand, it could be a fake debt collector! Armed with sensitive information he coaxes from you, the criminal could charge your credit cards or open new accounts, take out loans in your name, write fraudulent checks and more.

What You Should Know:

A debt collector might be a fake if the person is trying to collect on a loan you don’t recognize, refuses to give you a mailing address or phone number, asks you for sensitive information, or uses threats to try to scare you into paying.

What You Should Do:

•Tell the caller you refuse to discuss the debt unless you receive a written notice that includes the debt amount, the name of the creditor, and your rights under the federal Fair Debt Collections Practices Act.

•Don’t give the caller sensitive information. Never give out or confirm personal financial or other sensitive information unless you know whom you’re talking to. This includes your bank account number, credit card, or Social Security number.

•If the debt is legitimate, but you think the collector may be a fake, contact your creditor about the calls.

•If you get a call like this, report it to the Federal Trade Commission and warn others on the Fraud Watch Network Scam-tracking map.

Monday, August 15, 2016

ALBANY
-- A new law in New York will require that foreclosed-on properties not be
allowed to lie vacant for long and that more protections be built into the
foreclosure process for consumers.

The
changes were approved in the last hours of the state Legislature's regular 2016
session and represent, sponsors say, the latest attempt to protect consumers
against losing their homes due to nonpayment of mortgages and to neighborhoods
and to whole communities hit by the approximately 1 million foreclosure filings
in New York state since the recession of the late 2000s.

Provisions
of the legislation (A10741/S8159) provide for:

•
Creation of a Consumer Bill of Rights to state homeowners' rights in the
foreclosure process. Specifically, the declaration must inform property owners
that they have a right to stay in their homes during the foreclosure process
until they are formally notified by a court that they must vacate the premises.

•
A mandate that the crucial notifications that lenders are required to make to
borrowers be in a language the borrower is proficient in.

•
Creation of a Community Restoration Fund within the State of New York Mortgage
Agency as a vehicle to provide for the purchase of defaulted mortgage notes, in
some instances, to revise repayment terms and to allow some homeowners to hold
onto dwellings.

•
Authorization of a new civil penalty of up to $25,000 to be imposed by courts
to punish instances where plaintiffs are not negotiating in "good
faith" in preforeclosure hearings.

•
Authorization for courts to award attorney fees and expenses to defendants
where plaintiffs are found not to be negotiating in good faith.

•
Imposition of a new preforeclosure duty on banks and lending services to
maintain vacant and abandoned properties.

•
Requirement that the entity obtaining a foreclosure move to auction within 90
days of receiving the judgment and to take actions to ensure that the property
be reoccupied within 180 days.

The
foreclosure and "zombie" property legislation was signed into law by
Gov. Andrew Cuomo on June 23.

Cuomo
and state Attorney General Eric Schneiderman praised the bill, in particular,
for its focus on so-called zombie properties, those vacant or abandoned homes
that lie dormant before, during or after foreclosure. Municipal leaders
throughout the state complain that these properties have been allowed to
deteriorate, thereby degrading nearby properties or even entire neighborhoods.

Paul
Lewis, an assistant to Chief Administrative Judge Lawrence Marks, said court
officials believe the bill could impact the courts in two ways: Through the introduction
of the new penalties for plaintiffs found to be negotiating with property
owners in bad faith and through more frequent court declarations, at the behest
of municipal officials, that properties are abandoned.

He
said court officials are studying the new statute to determine if it gives
court referees and court attorneys, the authorities who now preside over the
preforeclosure conferences the state has required in foreclosure cases since
2010, the power to impose civil penalties on bad-faith negotiators.

Finally, courts across New York will now have uniform guidelines to help homeowners in foreclosure!

Since 2009 many homes were lost to foreclosure due to variations in how courts dealt with borrowers during FCP conferences (Foreclosure Conference Part). Obviously, unproductive settlement conferences were surely to blame as well.

One of the more important revisions revolves around "bad faith". Now that the courts have somewhat addressed this issue and provided some much needed direction we can hopefully see both parties (especially the banks) come to the table ready to settle. And, surprisingly it is sometimes the borrower who behaves as if they do not want to save their homes. I believe though, this is more due to frustration than anything else. Most of these "bad faith" issues revolve around lenders sending in per diem attorneys to conferences with little to no information regarding the case. Along with the banks invoking the famous "phantom investor restrictions" excuse. Clearly, this makes it impossible to settle. A tactic long used by the banking industry. Which when you think about it makes no sense. Aren't banks in the business of collecting money, not properties??

And, finally the most problematic issue we see is the failure to answer the summons and complaint. Unfortunately, many borrowers mistakenly believed that showing up in court and providing the bank with loan modification documents is the same as filing a written answer. The problem here is the borrower usually discovers after their case is removed from FCP that they failed to file an answer. Thankfully, the court will now address this problem by advising the homeowner at the first conference of the need to file an answer. Time to answer is limited though to 30 days from the initial FCP appearance. Clearly, the borrower must have a valid reason for not answering the summons and complaint.

--------------------------------------------------------------------------------------------------------------------Since their inception in 2009, settlement conferences
under New York's judicial residential foreclosure conference process, the
mandatory mediation program New York enacted in response to the foreclosure
crisis, have allowed thousands of New York homeowners to achieve settlements
and loan modifications, thereby averting foreclosures and sparing New York's
communities their adverse effects. But many homes have been needlessly lost to
foreclosure because of unproductive settlement conferences, with erratic
implementation of the law leading to dramatic variations in the efficacy of the
conferences (see Divergent Paths: The Need For More Uniform Standards and
Practices in New York State's Residential Foreclosure Conference Process (New
Yorkers for Responsible Lending), available at http://www.legalservicesnyc.org/storage/PDFs/divergent
paths.pdf).

Legislation enacted in the waning hours of the 2016
session included significant changes to the foreclosure conference process.
These amendments fill many of the gaps that the original legislation left open,
so there is now hope that the settlement conference law will be more rigorously
implemented in all jurisdictions, with uniform consequences to deter its
violation, and the legislature's intent to prevent avoidable foreclosures and
encourage home-saving loan modification solutions more effectively implemented
across New York State. The amendments clarify the courts' obligation to ensure
a meaningful negotiation process that prevents avoidable foreclosures by
clarifying the obligations to appear with required information and authority,
defining the good faith negotiation standard, detailing the remedies when the
negotiation process is subverted, and preserving homeowners' ability to defend
foreclosure actions on the merits, among other changes.

Settlement Conferences

CPLR 3408 was enacted in 2008 and amended in 2009. It
provides for mandatory residential foreclosure settlement conferences at which
the parties are encouraged to negotiate, at face-to face court-supervised
settlement conferences, foreclosure-avoiding solutions such as loan modification
agreements (CPLR 3408(a), (f)). It requires parties appearing at conferences to
appear with authority to dispose of the case (CPLR 3408(c)), and requires the
courts to provide notice to the parties of the scheduling of the conference and
the documents to be brought to the conference (CPLR 3408(e)).

Although CPLR 3408(f) presently expresses a preference
for home-saving loan modifications, specifying that "the plaintiff and
defendant shall negotiate in good faith to reach a mutually agreeable
resolution, including a loan modification, if possible," for some
homeowners other options such as "deeds in lieu of foreclosure" or
"short sales" are more viable.

Some courts denied defendants settlement conferences
based on a determination that the homeowners could not qualify for a loan
modification, depriving homeowners of the opportunity to avoid foreclosure with
a negotiated settlement as the Legislature intended. The amendments clarify
that other loss mitigation options, not just loan modifications, are proper
subjects of settlement conferences (CPLR 3408(a)).

Following amendment in 2009, the law imposed an
affirmative obligation to negotiate "in good faith" to achieve such
loan modifications, if possible (CPLR 3408(f)), but the law left "good
faith negotiation" undefined, and prescribed no remedies when that
standard is violated, leaving the courts to devise their own, sometimes
idiosyncratic, definitions of good faith and to craft remedies when parties did
not fulfill the mandate to negotiate in good faith. The recent amendments fill
some of the gaps left by the original law.

The amendments adopt a good faith definition evolved from
case law, stating that it "shall be measured by the totality of the
circumstances." Courts determining good faith shall now consider: (1)
compliance with the requirements of CPLR 3408 and applicable court rules,
orders or directives of the court or its designees; (2) compliance with
applicable mortgage servicing laws, rules or regulations and loss mitigation
standards; and (3) conduct consistent with efforts to reach a mutually
agreeable resolution, including avoiding unreasonable delay, appearing at
conferences with authority to settle, avoiding prosecution of foreclosure
proceedings while loss mitigation applications are proceeding (known as
"dual tracking"), and providing accurate information to the court and
parties (CPLR 3408 (f)).1 In light of some courts' reluctance to
consider conduct preceding the formal start of settlement conferences when
assessing good faith, the reference to dual tracking is significant, because it
by definition authorizes consideration of conduct preceding the settlement
conference process.

The amendments provide additional guidance about other
settlement conference requirements. CPLR 3408(c) clarifies that any party's
representative at the conference must appear with authority to dispose of the
case. In the past, plaintiffs routinely appeared by per diem lawyers or
representatives lacking required authority or information needed for meaningful
negotiations. As a result, the settlement conference process is often
needlessly protracted. See Stalled Settlement Conferences: Banks Frustrate New
York's Foreclosure Settlement Conferences, April 29, 2014, available at http://nylawyer.nylj.com/adgifs/decisions14/050214report.pdf.

The amendment revises the language to make the appearance
with authority requirement applicable to all representatives appearing at
conferences. Also, while the original statute allowed only plaintiff's
representative to appear telephonically or by video conference, as amended,
either party's representative may be permitted to appear by video or telephone.

The amendments also add stronger language concerning the
obligation to bring required information needed for meaningful settlement
negotiations to conferences, for both defendants and plaintiffs (CPLR 3408(e).
The amendments require plaintiffs' representatives to appear with a summary of
the status of the plaintiffs' evaluation of any pending loan modification or
loss mitigation applications, including a list of outstanding items required
for completion of the application; an expected date for completion of the
review of the application; and, if the application was denied, a denial letter
or other document explaining the basis for denial and documentation supporting
denials.

Plaintiffs' invocation of phantom investor restrictions,
and refusals to seek waiver of such restrictions as is required by the federal
Home Affordable Modification Program (HAMP) governing most loan servicers, has
been an impediment to settlements and has led to much litigation concerning
failure to negotiate in good faith,2 so the requirement that
plaintiffs supply this back-up for modification denials provides greater
transparency and should prevent litigation on these issues.

Adjudicating Disputes

Addressing the statute's failure to specify a remedy for
violation of the statute,3 the amendments provide a process for
adjudicating disputes under the statute and enumerate prescribed remedies for
its violation. A new section, CPLR 3408(i), empowers the court to determine
good faith and order remedies either on motion or sua sponte, on notice, and
also provides that referees, judicial hearing officers or other court staff may
hear and report findings of fact and conclusions of law, and may make reports
and recommendations for relief to the court. New subsections (j) and (k)
enumerate remedies when both plaintiffs and defendants fail to negotiate in
good faith.

CPLR 3408(j) mandates that when plaintiffs fail to
negotiate in good faith, the court shall, at a minimum, toll interest and fees
during any undue delay caused by the plaintiff, codifying the most commonly
granted remedy under the case law construing CPLR 3408(f).4 The
court may also compel production of documents requested during conferences,
impose a civil penalty not to exceed $25,000, and award any other relief deemed
just and proper (CPLR 3408(j)).

For defendants who fail to negotiate in good faith, CPLR
3408(k) specifies that the court shall remove the case from the conference
calendar, but cautions that the court shall take into account "equitable
factors," including whether the defendant was represented by counsel. This
is important recognition of the disparity in bargaining power at settlement
conferences, where foreclosing lenders are among the world's largest financial
institutions and are always represented by counsel, while defendants are among
the most vulnerable, and often are left to fend for themselves without access
to counsel or understanding of the court proceedings in which they find
themselves.

Assistance for Homeowners

Foreclosure actions historically proceeded on default in
most cases, with no homeowner defendant participation. With the advent of
settlement conferences, defendants have become participants in the process, as
homeowners lacking access to counsel or the wherewithal to answer a complaint
are nonetheless able to—and do—appear in court for settlement conferences when
they receive notice from the court of a scheduled conference date.5
But homeowners who have participated in conferences and believed they had
"answered" by attempting to negotiate a settlement in court and
complying with onerous application processes and documentation requests from
their mortgage servicers have, upon exhaustion of settlement conferences, been
prevented by the courts from submitting answers and litigating their cases on
the merits.6 The amendments address that unintended problem.

CPLR 3408(l) now obligates the court, at the first
settlement conference, to advise the defendant of the requirement to answer the
complaint, to explain what "answering" a complaint entails, that the
ability to contest the foreclosure and assert defenses may be lost if an answer
is not interposed, and to provide information about available resources for assistance.
Also, a new Section 3-a of RPAPL 1303 directs the Department of Financial
Services to publish a Consumer Bill of Rights detailing the rights and
responsibilities of parties to foreclosure proceedings, which the court must
provide to foreclosure defendants at the first settlement conference, pursuant
to CPLR 3408(l).

A new subsection (m) of CPLR 3408 overrules much of the
appellate case law effectively barring non-answering defendants who
participated in settlement conferences from vacating defaults and interposing
late answers, providing that a defendant who has defaulted in answering but
appears at settlement conferences is presumed to have a reasonable excuse for
the default and shall be permitted to serve and file an answer, without any
substantive defenses deemed waived, within 30 days of the initial appearance at
a settlement conference, and with the defendant's default being deemed vacated
upon service of such late answer (CPLR 3408(m)). This will spare the courts
adjudication of motions for leave to vacate defaults and serve late answers,
which currently flood the dockets of both the trial and intermediate appellate
courts and will better implement the preference of disposition of cases on the
merits.

Subsection (m) of CPLR 3408 also codifies existing
practice under the Uniform Court Rules (Uniform Rules for the Supreme Court and
the County Court §202.12-a (c) (7)) specifying that motions shall be held in
abeyance while the settlement conference process is ongoing, except for motions
concerning compliance with CPLR 3408 or its implementing rules. This makes
clear that parties participating in the settlement conference process have
redress for violations of the settlement conference law even if other motion
practice pertaining to the case is held in abeyance (and even if they have not
answered the complaint).

US
Bank moved for summary judgment and an order of reference in this mortgage
foreclosure action. The now-deceased borrower, Eisenman, failed to make
payments, but defendant opposed the motion arguing dismissal was warranted due
to bank's failure to serve the estate of Eisenman with notice of default under
RPAPL §1304. The court found bank established prima facie entitlement to
summary judgment and an order of reference noting defendant failed to raise an
issue of fact precluding summary judgment in bank's favor. It found defendant's
laches argument meritless, as was the claim bank failed to comply with the
notice provisions of §1304. Also, contrary to defendant's claim, the Jan. 30,
2012 dismissal of a prior action against Eisenman was not dismissed on the merits,
and was not res judicata barring this action. The court stated prior courts
found §1304 was inapplicable where the borrower was deceased. Therefore, as
Eisenman, the borrower, was deceased, there could no longer be notice given to
the borrower, and accordingly, the notice provisions of RPAPL §1304 did not
apply. Hence, bank's motion for summary judgment, and an order of reference was
granted.

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